Kraken is reevaluating its methods about going public after Coinbase’s poor results following its direct launch.
Kraken Rethinks Going Public
Coinbase debuted on the Nasdaq in April with a valuation of US$103 billion, calling the attention of many in the crypto industry and Wall Street as the first crypto exchange to be traded in the public market.
But seeing Coinbase’s results, Jesse Powell, CEO of Kraken, is revaluating its plans to go public. Speaking to Fortune on June 11, Powell said a direct listing might have certain benefits, like no intermediaries —which makes it a cheaper process— but it might have a “dampening effect” in the long run.
“An IPO is looking a little more attractive in light of the [Coinbase] direct listing’s performance. I would say we’re looking at it more seriously now, having the benefit of seeing how the direct public offering played out for Coinbase.”
Said Jesse Powell
The Pros and Cons of an ICO
Coinbase went public earlier this year at $381 per COIN after a massive increase in users and revenue for 2020.
While a company that goes public with a direct listing doesn’t depend on intermediaries, an Initial Public Offering does, and this has raised concerns in the crypto community —an IPO usually involves a Wall Street bank, and according to Powell, Wall Street still doesn’t understand crypto.
“I think it’s the same thing that the Street missed about Amazon 20 years ago and what they are missing about Tesla now. I think they are just so tied up with the legacy way of doing things.
Wall Street in particular, and this is financial services, and I think there are a lot of players that have a lot to lose from the success of this space. I think you might be seeing people facing this cognitive dissonance of becoming increasingly aware of the impending doom of the legacy financial system.” – he concluded.
However, Powell added that a direct listing aligns better with the nature of the decentralised crypto world, but this also presents some problems:
Not having lock-ups, having billions of dollars of insiders be able to dump their shares, you know, on day one […] I think it has a dampening effect on the market.”
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